PPP loan update: Should you prepare for an audit?

In another installment of the “COVID-Proofing Your Pest Control Business” series, hosted by PCO Bookkeepers and Coalmarch, Dan Gordon and Donnie Shelton went through some questions pest control operators may have about the Paycheck Protection Program (PPP), like what documentation you should keep and whether you should prepare for an audit.

Watch the replay above and review the transcript below.

Donnie Shelton: Hello everyone. It’s Donnie Shelton here with you, with Dan Gordon from PCO Bookkeepers. We thought we would just do a quick installment. There’s been a lot of changes since we’ve done this “COVID-19-Proofing Your Business” series and there’s been a few developments with the PPP program, and so we thought we’d spend just a few moments and talk through those. Of course, I am Donnie Shelton. I’m with Coalmarch. I also own Triangle Pest Control. We offer digital marketing services through a technology stack, as well as digital platforms that you can use to grow your business. Of course, we have Dan on. Dan, you want to talk a little bit about PCO Bookkeepers before we get into this?

Dan Gordon: Sure. Good morning, Dan Gordon. Or good afternoon, whenever you view this. PCO Bookkeepers is an accounting firm that caters to the pest control community. We do tax preparation, we do monthly CFO services and we also provide merger and acquisition consulting and brokerage services. We’ve got a lot of insight with over 300 clients running over $600 million worth of pest control revenue through our accounting firm. We have a pretty good pulse on what’s going on in the industry. This PPP loan has been dominating the news, dominating the minds of our clients, and there’s a lot of items that change and interpretations that change. Today would be a good day to talk about what we know now as of May 1.

Donnie Shelton: Dan, it’s been interesting. When the PPP program first came out, it was pretty much a free for all. It was like, “Hey, if you’ve been affected by COVID-19, which at the time, who hadn’t been affected by COVID-19? We were all at home, which I am still personally still at home. I think there’s some places that are started to open up, but they ran out of money. I know that’s a big shocker to everyone, but they ran out of money within two weeks. There has been a new round of funding and also some new requirements. I thought we’d spend some time talking about these new requirements. We’ll talk a little bit about what’s happening in Washington and how this is changing because there’s no doubt the program in its initial state versus the program now and especially what we’re seeing with all the changes.

Dan Gordon: The PPP program, really, when it was first conceived, it was about keeping people employed. We had this tremendous shock to our economy and the government in an unusual fashion got together, both Democrats and Republicans and passed some legislation.

They got together, passed this legislation, among other things, with the CARES Act and created this PPP thing. Basically, it’s a payroll protection program. When they conceived of it, it was more about, my gosh, our economy shut down. We’ve got to keep people employed. It had nothing to do with whether Donnie’s business was going to succeed or fail or go up or down or mine or yours. It was about keeping people employed. What they did is they said, “OK. Well, all you need to do is apply for the loan and if you meet certain criteria some or all of that loan will be forgiven.” Basically, it was a two-page application where you basically said that you’re not a criminal, that you attest to certain things and that you provide information about payroll.

What they did is they said, OK, we’re going to give you a loan in the amount of 10 weeks of your payroll and we’ll talk about the calculation and how that worked later. Ten weeks of it. We’re going to give you that loan, and then once you receive that loan, you have eight weeks to spend it down on payroll. Again, we’ll go through the calculation. You can spend the money on rent, you can spend it on utilities, you can spend it on mortgage interest.

Donnie Shelton: Dan, I think this is really important because I remember when this first happened and they were announcing what was going to be part of the program and they released this application. I remember calling my bank and being like, “Am I seeing this? Is this really free money?” And he’s like, “Yeah.” He’s like, “Everyone is surprised.” And I think the intent was, let’s get the money out as quickly as possible. I remember saying, “Are you sure?” He’s like, “Absolutely.” He’s like, “Everyone’s looking for this. Hey, it’s free money.” Anyway, continue. I think that’s an important point.

Dan Gordon: Yeah. I know. It’s become a total political hot potato after the fact. A lot of the money went out first round, and we’re in the second round here, but basically you attested to the fact that you feel that you’ll be harmed by the crisis and if you could attest to that fact, then you’re eligible for the money. Well, who isn’t on that day or even now sure or unsure that you’re going to be affected by the COVID crisis? You will, whether it’s today or if this goes on for many more months, you’ll… We don’t really know. What happened is everybody attested to it, and when you attest to it, you didn’t lie. You don’t know what’s going to happen, and now all of a sudden, you’ve got treasury regulations and FAQs coming out. Again, remember, regulations are written by regulators and they’re interpretations of the law. They are not the law. OK?

Dan Gordon: I subscribe to a lot of newsletters from law firms and accounting firms and there’s a lot of different opinions, but it seems to me that once the law is passed in perfect fashion, the way the government works, there’s a bunch of grand standing, a lot of these senators and congressmen are pounding the table and saying, “My goodness, what about the oversight?” Well, that wasn’t really conceived at the beginning and now all of a sudden it is. Some of the rules have changed. Let’s go through some of the slides because I have a couple of interesting ones.

Donnie Shelton: Well, I was going to say I think the intent, everyone was like, “Yeah, absolutely. We passed this, we’re helping small businesses. We’re doing something. There’s this $2 trillion package that we’re putting in and $350 billion is going to be for small businesses.” Then the Lakers got their paycheck loan.

Dan Gordon: It’s all about the Lakers. The Lakers and Ruth’s Chris.

Donnie Shelton: I’m not a Lakers’ hater. I like LeBron just like everyone else, but of course that story gets sensationalized, which, did Lakers break the law getting a PPP loan? No.

Dan Gordon: They didn’t. It was just a bad look. And Ruth’s Chris Steakhouse and full transparency, I like Capital Grille a whole lot better, but these are big companies that it’s easy for politicians to go after and say that they’re fat cats. The Lakers probably didn’t need the money. Does Ruth’s Chris need it? Well, Ruth’s Chris is a restaurant organization. They employ dishwashers and wait staff and chefs and whatnot and their restaurants are shut down. So yeah, they probably could use the money. What we did or what came out in this FAQ and more specifically there’s one particular FAQ where they talk about what is uncertainty? They pivoted from “This is about saving payroll” to “Do you have the means to save the payroll?”

It’s a means test. What they said is, “Well, if you’ve got money in the bank and if you’ve got access to credit lines or public markets or whatever, you may not need the money.” The fact of the matter is, if I got the money and I keep people employed that I otherwise may have furloughed because of the whole situation, but I kept them employed, now all of a sudden you’re going to say, “Well, I’ve got to give that money back.” Well, who takes care of paying those people? I’ve already paid them. That’s a huge problem.

Donnie Shelton: I want to get into that because I think later on in the webinar we’re going to talk a little bit about the changes because you’re absolutely correct. The requirements on the first round versus the requirements in the second round are very different and it all goes around this whole concept of what is your real need? It was interesting of who got funded and who did not get funded on the first round. It looks like to me, depending on who you banked with obviously the timing that you got your application in and I think probably the more important part is who do you bank with and how fast did they get their act together and get their application in? I know there’s some folks on our webinar who did not get funded the first round, hopefully they have been funded by now in the second round.

Let’s answer this question: “What if I did not get funded the first round? Now what?”

Dan Gordon: There is a second round and you can make application, but honestly, and I’ve spoken to several bankers, most of the people who are getting funded in the second round are those who got shut out of the first round and they’re recycling those applications. More likely than not, if you apply today, you’re probably not going to get it. Unless you have a good relationship with your banker. Now I say that on the QT because there’s a lot of politicians, again, having temper tantrums over these banks who are favoring their best clients. The fact of the matter is the SBA is going…

Donnie Shelton: Favoring their best commissions. Maybe that’s a better way of putting it.

Dan Gordon: Well, clients and commissions, but think about this. The money is actually a loan and then some of it gets forgiven. The bankers, if you think about this, now, we in pest control probably aren’t getting hit as hard as certain industries, like restaurants and bars and bowling alleys and things like that. More likely than not, those folks who take the money are going to go bankrupt, they’ll never pay back the money.

Donnie Shelton: That’s right.

Dan Gordon: Banks are looking for people that they think have good credit and are going to pay back the money because what they’re going to do is they’re going to package up these loans and sell them, just like mortgages. The fact of the matter is some of the smaller banks who are big SBA lenders had their systems a whole lot better than some of the bigger ones. Like we applied to Chase and we got a confirmation from Chase that said, “We got your information, please don’t call us. Please don’t email us. We don’t have a website that you can go on to check the status, we’ll be in touch.” Two weeks later, I got a rejection. Said, “Sorry about it.” I went to a smaller bank and I immediately, on the second round, I actually got my money within a day.

Then yesterday I actually heard from Chase, they said, “Hey, we think that you might qualify.” But I’ve already got my money. This is what’s going on.

Donnie Shelton: The take home here is that your bank may or may not have been ready to go. Even if they were ready to go, there may have been, and by the way, I have to be really careful on how I say this. There may have been some reshuffling of applications based on risk and also based on commission. We don’t know that, that’s all speculative, but there’s already been lawsuits filed with accusations of that. Hopefully, and I agree with you 100 percent, if you did not get your funding the first round, hopefully on the second round you will get it. If you’re just now starting the application process, I don’t know if there’s going to be enough funding there.

Dan Gordon: Let’s get back to that commission that you had brought up, which I think is interesting. If I’m a banker, basically if I do a loan for $350,000 or less under this program, I get a 5 percent commission. That doesn’t come out of your funds. The government pays it. If I do one from $350m,000 to $2 million, I get 3 percent and over $2 million, I get 1 percent. Now, obviously it’s a lot easier to do one of these $5 million ones and get the 1% from a great client who’s got great credit. But if you think about it, if I’m the bank, what am I going to do? I’m going to do a bunch of $350,000 loans. And if you look at the stats, and one of the stats was that the average loan was $250,000. Let’s assume that the entire program between both traunches is over $500 billion. At 5 percent, that is $25 billion in commissions.

There’s a huge money grab over this. You’ve also got brokers who are out there who were referring to banks and expect a piece of that. You’ve got lawsuits from brokers suing banks over commissions. It’s a huge political hot potato. It’s a huge money grab. It’s not the whole kumbaya thing that everybody thought that it was on day one and it’s only going to get worse.

Donnie Shelton: Now the government says, “Okay, we’re out of money. We’re going to refund this.” When I say refund, not actually give them money back, but they’re going to refund the program, they’re going to add some more funding to it. Of course at this time, now the news media jumps on the bandwagon and they start calling out companies like Shake Shack, the LA Lakers, and these other folks who, by the way again, never broke the law, did everything according to their program guidelines when it first came out and they started adding guidelines. What’s up with this new round of funding? Let’s talk through that real quick.

Dan Gordon: Again, it’s this means test that we discussed before about whether you have access to capital – either cash in the bank or credit lines and whatnot. It’s also retroactive to the first traunch. If you think that you’re in good shape because you were funded in the first traunch, you’re subject to this oversight. Now, most of our clients unless you committed fraud in your application, you should be OK. Again, if you’ve committed fraud, then you’re going to be subject to criminal penalties, but really it’s going to come down to when you submit your application for forgiveness on the loan, you’re going to have to supply some documentations.

Donnie Shelton: This is really important and I just want to make sure that because there is a forgiveness window that if for whatever reason, the government says, “Hey, you think you don’t meet this needs test, you can give this money back and no harm, no foul.” But I think, for a case of like Triangle and even Coalmarch, when we use a PEO, I ran a report, I submitted it, done. I have heard cases of folks, and I guess it probably depends on your bank, too. Our bank required some form of justification for what your payroll is going to be. I don’t know that was the case with all banks. If there’s someone who said, hey, my payroll was this, but it really wasn’t that. I would say I would be giving that money back ASAP.

Dan Gordon: We definitely have clients that put it through, got it funded based on what they requested. For example, the employer portion of payroll taxes are not supposed to be in that calculation, but we have clients who got funded for that amount because it went through so quickly. The bank that I dealt with that got me through pretty quick, they had their processes pretty tight because they had a “know your client” checklist and I spent several hours on a two-page application putting all of the documentation together. That’s the kind of thing that’s going to come up in a document request when you go for the forgiveness.

Donnie Shelton: Will the SBA review individual PPP loan files?

Dan Gordon: As of now, the first line of defense is the bank. Your banker will be requesting the documents. Now, they’ll be submitting it to the SBA, but remember how many loans there are out there. If you think about an IRS audit, your chances if you’re not doing anything funny, your chances of being audited are probably one in 300. That’s because of the manpower of the IRS. Now, I don’t know what the manpower of SBA or this oversight will be, and I don’t know how many loans are going to get done, but the fact of the matter is if they audit half of them, you’ve got a 50-50 shot at not being audited. OK? By the way, just because you’re audited doesn’t mean that you’re in trouble. They’re just confirming, they’re keeping honest people honest. Right?

Donnie Shelton: Right.

Dan Gordon: That’s what you do.

Donnie Shelton: They released an update to FAQ No. 31, and we’ve talked about this. They basically defined what “needs” means. It’s just the language that they use and you can read it there, but it basically says, “You must certify that you’ve been harmed by the corona crisis and that PPP is necessary to maintain operations.” Now, I can tell you if you asked a hundred different people you would probably get a hundred different answers as to whether or not they’ve been harmed. The part that I think is pretty interesting about this entire statement is the ability to access sources of liquidity sufficient to support their ongoing operations. Is that based on my goals? Is that based on uncertainty? I think it’s still very gray.

Dan Gordon: Here’s an interesting one. If you read the actual application, and I’m looking at a copy that I signed, the attestation that you made was current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant. That’s a whole lot different than saying that you have been harmed. In fact, Senator Marco Rubio, who’s one of the guys on the oversight committee, he basically said that he’s willing to subpoena companies as he chairs this panel to prepare oversight. What he is saying is that, “Borrowers requirements that specify that a business should make a good faith certification, that the uncertainty of current economic conditions makes the loan necessary to support ongoing operations.” That’s what it says and what he’s saying is any business regardless of size, must certify that they’ve been harmed by the crisis.

Well, those are two different statements. Do you think you’re going to be harmed or are you harmed? By the way, we’re in the first inning of this thing, we don’t know whether we’re going to be harmed currently, pest control companies, for the most part most of our clients are saying we’re OK, but three months from now, that could change, that could change drastically. They were actually pretty clever about it coming back and not saying, “Well, you’ve been harmed because your revenue is down.” Although I’m sure that a year from now when the lawsuit starts that will be one of the criteria. What they’re saying is, do you have access to capital? Again, I go back to the fact that we’re changing the rules, I may have laid some people off if I didn’t get the loan and all of a sudden I’m paying them and now you’re telling me that I don’t qualify for the loan?

Donnie Shelton: Right. Yeah, that’s interesting. Since we’re on this topic of forgiveness, let’s talk about that. Just so everyone knows, your eight-week period starts when you get the money, the eight-week clock starts right?

Dan Gordon: Before you go on, that could change. The AICPA, which is the governing body of CPAs, has made recommendations to Congress and they have a powerful lobby and Congress listens to them on accounting issues. They have stated that they believe that the eight-week period should start when the state that you live in opens up again. In other words, when they take off the stay-at-home order. That’s not the law, that’s not the rule, but that’s what the AICPA is recommending and has already submitted to Congress. Again, changing the rules. But if that’s the case, that’s probably a better measurement time because you’re not going to pay people to stay at home at that point. You’re going to pay them to work.

Donnie Shelton: Well, currently the way it’s written though is that when you get your money, the eight-week clock starts and then at the end of that eight weeks, there’s an evaluation. You get a 10-week loan, you got an evaluation for eight weeks and then… But there’s no timeline as to, OK, now that eight-week period is done, now when will I know that I’m either forgiven or I’m not? Right?

Dan Gordon: Yeah.

Donnie Shelton: How long do you think that’s going to take?

Dan Gordon: I don’t think that from the bank’s perspective that’s an issue. From our perspective, the loan, the non-forgiven portion doesn’t start for six months. If it takes a month, who cares? But you’re going to have to at the end of eight weeks certify that you paid a certain amount of payroll, that you paid a certain amount of rent, that you paid a certain amount of utilities and mortgage interest, and they’re going to ask for documentation showing that that’s what you paid. Now, the reason, if you think about it, they gave you the 10-week loan, but they’re giving you eight weeks to pay it back or eight weeks of activities to forgive. If you want to optimize your efforts, you’re going to run up your payroll, you’re going to pay your rent, you’re going to pay your utilities and whatnot and try and get the whole thing forgiven.

Now, if you don’t, the rest turns into a loan and so that’s the crux of it. As far as when will you know whether it’s forgiven, I’m sure it’ll take a little bit of time, but I don’t know that it’s that important other than for planning purposes in six months. By the way, the loan portion gets paid back in 24 months. So if you’ve got a $1 million loan and none of it gets forgiven, those payments are massive. You got to think about that.

Donnie Shelton: For sure. We’ve already answered this question as to when the clock starts for now as of May 1, 2020. Next question is, what is actually included in the payroll calculation?

Dan Gordon: Payroll is your gross wages and that includes wages, hourly, overtime, bonuses, commissions, anything that that goes into gross wages. It also includes the state portion of employer taxes. Usually SUTA, state unemployment tax, and whatnot. It includes health insurance that you pay on behalf of your employees, 401(k) matches or pension matches, any other type of benefit if you give disability insurance or life insurance. All of that goes into the calculation. What does not go into the calculation is the employer portion of FICA, which is your social security and your Medicare. It’s 7.65 percent. If you just take your cash requirements off of your payroll report, you’ve got to remove that FICA portion to come up with the number.

Donnie Shelton: Since we’re on “what’s included in forgiveness,” let’s talk about rent real quick. Let’s get into that. What does that mean?

Dan Gordon: Rent is your office rent and whatnot, but I was speaking to a banker the other day and she seemed very aggressive, that’s why I like her. I said, “Look, what about related party rents? I own a building in a separate LLC and I’m paying myself in that LLC, is that rent?” She said, “We believe…” When they start it off that way. “We believe that if you’re charging fair market value that you won’t have a problem.”

Donnie Shelton: I was going to say, I know a lot of owners who do that and what is fair market value?

Dan Gordon: If you’re dealing with a local bank, they know what the local real estate market is like. If you’re trying to juice it, they’ll know.

Dan Gordon: Utilities is your electric and water and sewer and whatnot. An interesting thing, and I still have not gotten clarity on this and a lot of accountants and lawyers are bringing it up that service businesses, the fuel in their vehicles counts as utilities. What I was going to-

Yeah, so what I was going to say is it’s extremely important. It’s not a requirement, but my thinking is you set up a separate account, you put this money in that account, you pay your payroll from the account, you pay your rent from the account, you pay your utilities from the account and mortgage interest, which is another item that you’re allowed to deduct. Then you say, “Well, why do I need a separate account? I could just show them what’s on my bank statement.” Well, as a CPA, I’ve been through countless audits and the thing that you never want to give to an auditor is too much information. You don’t want to give them your bank statement so he or she can look at everything. If you’ve got a bank statement that just covers this stuff, you’re probably in better shape because no questions arise.

Dan Gordon: What that means though is if you pay your fuel bill out of there and we’re wrong, so what? We knock that out of the calculation, but I definitely would include my fuel bills out of the specific account.

Donnie Shelton: Now again, as of May 1, 2020, a particular politician has said anything over $2 million is going to have a full audit. What does that even mean?

Dan Gordon: That’s again, one of those grandstanding things, because what does it matter how much it is? If I employ 499 employees, because you can only employ 500 under the program, and you only employ two, shouldn’t I be able to get a bigger loan to pay my employees? That’s a bit of grand standing. But if you’ve got over $2 million, be prepared for an audit. If you got under $2 million, I would be prepared for an audit anyway. What does an audit entail? Basically, there’s two aspects to it. No. 1, did you need the money at all? And No. 2, if you’re asking for forgiveness, what were those payments that you made and what kind of backup documentation do you have?

Now as far as looking for forgiveness you’re going to need your payroll records, you’re going to need your 941 tax returns, which are payroll returns. You’re going to need your state unemployment forms and you’re going to need from the payroll company, the payroll registers for that period. What are you going to need for rent? Canceled checks, somebody might want to see a lease that you signed. For utilities, those will be utility bills along with the canceled checks, including fuel and whatnot. If you’re going to make interest payments, you need to have the loan documentation for the interest.

What’s more interesting is if you get audited and they say, “Well, you should have never got this.” I got a newsletter from a law firm, and in typical law firm fashion they wrote this really long email about what to do and lawyers like to cover their butts and…

Donnie Shelton: And kill deals.

Dan Gordon: And kill deals, but they want to make sure that, it’s not enough that you have a belt, it’s not enough that you have suspenders, you have to have a belt and suspenders. I’m just going to read a few of the bullet points. You need to collect and maintain records of company employee count and hour requirements. I don’t have a problem with that. Pre COVID-19 operations and subsequent decline cost and access to capital, cash on hand, budget forecast and reforecast, financial metrics that you use to determine what the future looks like. Maybe creating an internal memorandum summarizing the nature of the current economic uncertainty, both current and foreseeable, that makes a PPP request necessary to support ongoing operations.

Donnie Shelton: Hang on. So if I got a company of five people, I’m going to create an internal memorandum?

Dan Gordon: You could probably pay later the law firm $800 an hour to create this internal memorandum.

Dan Gordon: These are some of the things that folks are saying, and by the way, I can craft an internal memorandum today. It doesn’t make it true. Right?

Donnie Shelton: Yeah, for sure.

Dan Gordon: But a lot of times what happens is when you’re in a situation where you’re trying to prove something, if you can go back and show your notes, what you were thinking at the time, that does have some credibility. The last one, I thought it was interesting. Contemporaneous documentation of the company’s justification for seeking the loan if current, accurate and complete would be to provide helpful support for the company’s good faith basis for making the necessity certification. How do you do that? Right?

Donnie Shelton: Yeah.

Dan Gordon: On the day when the economy shut down, everybody thought that we were in big trouble, and we still are in big trouble. We’re in the first or second inning of this thing. We don’t know how this whole thing’s going to end up. I sent out an email last week that scared a lot of people and the email, basically, it’s funny, my mailbox got filled up and my phone rang off the hook and said, “What are you telling us, to give back the money?” If you look at my email, the last paragraph in bold letters say, “I do not recommend you give back the money. I recommend that you keep impeccable records.” That’s what I recommend. Unless you committed fraud, now there is a case to be made for those people who received the PPP in excess of the amount that they should have got.

By including the fight… That was on the bank because the original application said that it was included. If you receive that amount, I probably would go back to the bank and say, “Listen, I got to give this portion back because that was not includable.” Other than that, I don’t think that you should give back the money unless you committed fraud or you really think that this whole thing doesn’t apply to you. Again, just because we’re doing well now as an industry doesn’t mean three months from now that we don’t hit the skids and it really hits us.

Donnie Shelton: I think that’s probably the key issue here, is just the uncertainty. No one knows and so it’s like… I agree with you 100 percent. We got the money, we’re keeping the money and I’ll answer this question here as far as what we’re doing is, once you get the money, what’s the first thing you should do with it?

Dan Gordon: Put it in a separate account.

Donnie Shelton: What I would say, for us, right now, we’re not really… Obviously we’re going to cover our payroll, we’re going to use that money for what it’s intended to do, but I’m not in a big hurry to reinvest. I’m not in a big hurry to move on because I don’t know… Not only is there an uncertainty in the economy, now there’s uncertainty with this note, and this loan and what’s going to happen with that? I’m just like, “Let me hold it.” For me personally, I’m going to hold it and keep it and see how this all plays out. What’s your recommendation for that?

Dan Gordon: That’s exactly what we’re doing. We as an accounting firm, we got one and we will hold it and see what happens. How does this whole thing end? It’ll be very interesting if you remember what happened with Hurricane Katrina and FEMA and all of the craziness that went on. This is so much worse.

Donnie Shelton: Yeah. Now, you and I were discussing this the other day, and so I wanted to put it in on our webinar, and this question of “Is the PPP money really tax free?” You had an interesting take on this one, which I agree with, but I think it’s probably one we need to share here with our listeners because I think it’s an interesting take.

Dan Gordon: Yes. The good news is that the proceeds are not income, especially if it’s a loan portion that the forgiven portion is not income to you. However, it’s going to offset if you had $100 worth of payroll that you had to pay out of your pocket, but now you’re paying it out of the proceeds here, well, your profit’s going to go up by $100. While the money that you actually received is not taxable, if you’re still in a profitable position, in effect it really is taxable because you’re not paying some other expense that otherwise would be deductible.

Donnie Shelton: Right. 100 percent agree with that. It’s basically going to be dropped straight to the bottom line if you’re all profitable. Alright, next one. We’ve discussed this quite a bit on here. “How should I determine if I’m qualified for forgiveness?”

I would find the person that says yes and then go with it. Right? To me, looking at this and thinking through, I am 100 percent comfortable applying for the loan, I’m 100 percent comfortable keeping it, I just think the uncertainty surrounding this definitely… Because like what we’ve mentioned on here is I don’t know what’s coming. I have determined for both businesses, both Coalmarch and Triangle, we are qualified and we’re going to hold it. I would say that that’s my opinion.

If the bank or someone else who wants to certify that and wants to come in and back me up or check what I’m saying, I am 100 percent open for them doing that, but I guess if this question is out for other folks, how should they determine if they’re qualified for forgiveness or not?

Dan Gordon: Again it’s looking in the rear view mirror if you’re going to talk about whether your revenues are up or down, but remember that the original reason for the PPP was to keep people employed. I believe that there are going to be a lot of lawsuits in the future on people who are found to have made that certification in error because they had access to capital or because their revenue didn’t go down or whatever. That was the original intention of the act. If you want to listen to the law firm with those points, putting a memo in your files, but at the end of the day we’re in the second inning here, first or second inning, we don’t know. So I would hold onto it and then try to sort it out when you go for forgiveness and…

Donnie Shelton: We’ve already answered these questions. “What should I do now? Should I hold the money until I know for certain?” I 100 percent agree with that. We’re going to end this webinar, what I would consider to be the key question, and it is, “What are you going to do for your own business?” This is a question for me. This is a question for you, Dan. I’ve already alluded to this. For us, we applied, we got funded. I am holding it until I know. That’s what I’m going to do. Dan, for you, you’ve answered this as well.

Dan Gordon: Yeah, and I confirmed with my bankers what should I do here because, quite frankly, to date we haven’t really felt the pain that other industries have felt, but I don’t know how long that goes for. We’re keeping the money, we’re keeping it. We’re going to be careful and we’re going to make sure that it’s available should we have to pay it back, but at this point unless you did something criminal or you receive too much money based on the calculation, even though the bank made the mistake because the bank was the one who was supposed to go through your calculation and make sure that that’s the right amount. But I definitely, if they overfunded you, I would give that portion back.

Donnie Shelton: Well, I think that’s a wrap. I think we have done a pretty good job of getting through the latest, which I’m sure will be changing within a month or so. This is going to be an interesting time and it’s going to be an interesting thing to watch how this all plays out. What is really going to be forgiven. I don’t like the prospect of like, “Hey, here’s the money.” Then later on being like, “Well, actually.” And I don’t think it’ll happen mainly because I think there’d just be so many business owners and then how many…

Dan Gordon: There’s just too much volume, but there will be high profile people like AutoNation and Ruth’s Chris and the Lakers because it’s easy to take pop shots at them.

Donnie Shelton: Alrighty, and with that, I think we’re going to wrap it up. Again, I’m Donnie Shelton with Coalmarch. Again, we’re exclusive to the pest and loan industries, if you have any digital marketing needs, we obviously help companies grow their business. We provide infrastructure to help them calculate their marketing costs as well as getting them known online and helping them drive leads and sales at a good rate. Of course, Dan with PCO, Bookkeepers, I’ve been a client of his for a number of years. They do bookkeeping services, accounting services as well as M&A work and a few other things. Dan, if I missed it, you can plug in the holes there, but they are a great set of folks over there at PCO Bookkeepers.

Dan Gordon: If you need any help with your accounting, by all means, give us a call. If you’re thinking of selling your pest control business, probably not the best time to sell it right now.

Donnie Shelton: Why not?

Dan Gordon: Well, valuations have come down and a lot of the activity has dried up, but it is a great time to get your business in shape for a possible sale in the future, and we can help you with that as well.

Donnie Shelton: Yeah. All right. With that, we don’t have a plan schedule to push these out, what we did before on a weekly schedule. As things change, I would expect to see more of those. With that, we’ll sign off for this and we’ll be back when there’s more changes to talk about. Thank you very much.